Some Brands Are Still Sticking To Analogue Ads, While The Advertising World Goes Digital

Some brands are staying in an analogue world even as the rest of the world goes digital.

Some companies are preferring to stick with traditional print ads but according to the figures form MAGNA, businesses are expected to spend nearly $300 billion, or half their marketing budgets, on digital advertising by 2021.

And the irony is that sometimes, with many pages of ads before the actual editorial content, advertisements from the makers of high-end luxury goods, such as watches, jewelry and couture fashion, seem to make up the bulk of glossy magazines, and it is these companies that plan to spend more on digital advertising.

And with this figure set to stay high in 2017, at 72 percent, three-quarters of their budgets (73 percent) were still spent on print advertising in newspapers and magazines in 2016 by these “high luxury” companies around the world, figures out today show.

According to the report by media agency Zenith, 16 percent of their budgets on digital advertising in 2016, followed by outdoor billboards with 8 percent and TV at 3 percent, were spent by these high-end luxury goods companies.

Meanwhile, spending about 30 percent of their budgets for online platforms in 2016, increasing amounts on digital advertising are being made by companies that make more accessible, “broad luxury” products, including cars, cosmetics and perfumes.

The report states that the gap between TV and digital advertising will gradually reduce, even though TV advertising made up the bulk of broad luxury ad spend in 2016, at 41 percent. While digital will increase to 34 percent, up four percentage points on 2016 by 2018, TV ad spend will go down to 39 percent.

With the fastest-growing region being Eastern Europe, with 10 percent annual average growth, luxury brands (both high-end and broad) are forecast to spend $11.8 billion globally on advertising this year. Zenith forecasts that due to political instability and lower oil prices, the Middle East and North Africa will see ad spend shrink by around 6 percent a year.

“Luxury advertisers are having to respond to consumers’ changing expectations,” said Vittorio Bonori, Zenith’s global brand president. “Consumers are now looking for luxury experiences that are personal and relevant to them, and targeted brand communication is central to creating this extra brand value.”

But spending on print advertising could be working, it seems. after reporting a 15 percent year-on-year increase in first quarter sales, the shares of LVMH, the world’s largest luxury goods group, including the Louis Vuitton, Fendi and Celine labels, reached a record high last week.